SCHEDULES

SCHEDULE 5Enterprise management incentives

Part 3Qualifying companies

Meaning of “qualifying trade”

15

1

A trade is a qualifying trade if—

F1a

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b

it is conducted on a commercial basis and with a view to the realisation of profits, and

c

it does not consist (either wholly or as to a substantial part) in the carrying on of excluded activities.

2

The carrying on of activities of research and development from which it is intended that a connected qualifying trade will be derived or benefit counts as the carrying on of a qualifying trade.

3

But preparing to carry on such activities does not count as preparing to carry on a qualifying trade.

4

In sub-paragraph (2) “connected qualifying trade” means a qualifying trade carried on—

a

by the company carrying on the activities of research and development, or

b

if that company is a member of a group, by any other member of the group.